The positive link that part of the economic theory often assumes between (initially) rising inequality and improving innovation performances emerges as only one among many other far less virtuous dynamics. We then analyze the specific case of the US. We put emphasis on the possible perverse effects that the financialization of the US economy may induce on the inequality-innovation nexus. We also note that the US developmental State that is very often neglected by the economic literature may effectively mitigate such undesirable outcomes. According to our interpretation of recent developments in the US economy, the widespread belief in the positive proinnovation effects of fierce cutthroat remuneration systems may prove to be ungrounded.
Perverse and virtuous feedbacks between inequality and innovation: Which role for public institutions and public investment?
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- O1 Economic Development
- O15 Human Resources • Human Development • Income Distribution • Migration
- O16 Financial Markets • Saving and Capital Investment • Corporate Finance and Governance
- O3 Innovation • Research and Development • Technological Change • Intellectual Property Rights
- O31 Innovation and Invention: Processes and Incentives
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- O38 Government Policy